Owner-Financing deal -- what pro do we hire to make it legal?

3 Replies

So this is a multi-tiered question...

Working on our very first deal, negotiating with an elderly couple and would love to work out an owner-financing situation to then BRRRR. Any tips to negotiate, and keep it as simple and straightforward as possible for them to understand? (Especially when it seems a little complicated even to me)

If/when we get them to agree, what type of professional do we need to use to get it all legal and official? Real estate attorney, title company?-- who would be most efficient and cost effective? (Want to move quickly)

Hoping to get the house for $50k, would put $10k down. With perhaps amortized over 20 years? Still having to work out those terms once we have a better understanding of their motivations and desires. 

Considering we would like to refinance in a year or two to pay down the HELOC we are using for downpayment and rehab costs, and take out some equity for our next property, would it make more sense to offer a balloon payment at that time? How does refinancing work when its owner-financed?

Have them use their attorney and have yours review it.
Why?

1) They will trust their attorney over yours;

2) In the case of a dispute, courts typically take sides against the party that drafted the agreement.

3) They will bear the balance of the expense.  It is more costly to have an attorney draw up paperwork than have one review it.

Originally posted by @Allie Dattilio :

So this is a multi-tiered question...

Working on our very first deal, negotiating with an elderly couple and would love to work out an owner-financing situation to then BRRRR. Any tips to negotiate, and keep it as simple and straightforward as possible for them to understand? (Especially when it seems a little complicated even to me)

If/when we get them to agree, what type of professional do we need to use to get it all legal and official? Real estate attorney, title company?-- who would be most efficient and cost effective? (Want to move quickly)

Hoping to get the house for $50k, would put $10k down. With perhaps amortized over 20 years? Still having to work out those terms once we have a better understanding of their motivations and desires. 

Considering we would like to refinance in a year or two to pay down the HELOC we are using for downpayment and rehab costs, and take out some equity for our next property, would it make more sense to offer a balloon payment at that time? How does refinancing work when its owner-financed?

First, You can pick up a purchase & sale agreement at Staples. Fill it out with the seller.  Then, you need to call a title company, set up title report and escrow. Find a real estate attorney to do the agreement. Have the attorney do a "Disclosure" that the seller's sign that they now what they are doing. Escrow will take care of most of it

@Rodney Rowland Yarger I’m afraid that will sound like more work to them, and I’m trying to make this as effortless as possible— they’re content just letting the house sit vacant if they don’t have to bother with it. But I will keep that offer in mind if they seem skeptical.